March 21, 2023

DealBook: Santander’s Mexican Arm Said to Price Its I.P.O. at $12.18

A branch of Banco Santander in Mexico City in 2010.Susana Gonzalez/Bloomberg NewsA branch of Banco Santander in Mexico City in 2010.

The Mexican arm of Banco Santander priced the American portion of its initial public offering at $12.18 on Tuesday, within its expected price range, according to a person briefed on the matter who declined to be identified.

The unit, Grupo Financiero Santander México, sold additional shares on the Mexican Stock Exchange at 31.25 pesos each, at the middle of that offering’s expected range. The lender hoped to raise up to $4.2 billion through the dual listing, one of the biggest stock sales ever by a Mexican company.

When it begins trading on the New York Stock Exchange on Wednesday under the ticker symbol BSMX, Santander México will become the only Mexican lender listed on the Big Board. The offering was largely seen as a way to tap into Mexico’s growth prospects as investors hunt for ways to gain greater exposure to international markets.

The offering for the unit was also seen as a test for investors on a number of fronts. Its size, trailing only Facebook’s $18 billion stock sale for the year, was seen as potentially daunting at a time when the I.P.O. market has stagnated. The number of initial offerings priced this year has slid nearly 50 percent from 2011, according to data from Renaissance Capital.

And Santander México will still be closely tied to its parent, one of Spain’s biggest banks and a closely watched proxy of that country’s financial health. Banco Santander is expected to control about 75 percent of the company, raising the prospect that it may flood the market with additional shares if it needs to raise more capital.

Neither its size nor its Spanish parent appeared to be a major hurdle for investors. Santander México’s offering was about two times oversubscribed, according to Scott Sweet, the senior managing partner of IPO Boutique.

“Originally, I was concerned about the size,” Mr. Sweet said. “But as the road show took place, the conversion rates on orders was excellent.”

Investors appeared to be enticed by Santander México’s financial performance, which has outstripped that of the parent company. Its profit for the first half of the year rose 14.4 percent, to 556 million euros, as it benefited from improvements in the Mexican economy.

“There are very few quality banks that hit the I.P.O. front, whether they be in the U.S. or abroad,” Mr. Sweet said.

Profit at its parent, Santander, slid 51 percent in the first half from the year-ago period, to 1.7 billion euros, as it continued to grapple with Spain’s depressed economy.

Underwriters for Santander México sold about 20 percent of the bank’s shares in Mexico; the rest were sold internationally.

Santander has already taken its Brazilian arm public, raising about $7.5 billion, and said that it planned to hold I.P.O.’s for all of its biggest foreign subsidiaries within the next five years.

The Mexican stock sale is expected to bolster Santander’s capital ratios by about half of a percentage point.

The offering was led by Santander, UBS, Deutsche Bank and Bank of America Merrill Lynch.

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DealBook: Manchester United Trades Flat in Debut

Traders wearing Manchester United jerseys on the floor of the New York Stock Exchange on Friday.Justin Lane/European Pressphoto AgencyTraders wearing Manchester United jerseys on the floor of the New York Stock Exchange on Friday.

7:55 p.m. | Updated Manchester United had hoped to add to its soccer successes with a strong debut as a newly public company on Friday. But its initial public offering fell short of that aim.

On Friday, their first day of trading on the New York Stock Exchange, the soccer team’s shares closed flat at their offer price of $14, after having opened only 5 cents above that level.

The stock’s performance appeared to meet low expectations, after underwriters for the club priced the offering on Thursday below an expected range of $16 to $20 a share.

The team’s offering, which raised $232.4 million, was one of the biggest this year. The offering values the franchise over all at about $2.3 billion.

Manchester United has returned to the public markets during a year in which stock offerings have largely struggled. About $29.6 billion has been raised from initial stock sales through the end of July, according to data from Renaissance Capital, roughly 5 percent higher than at the same time last year. But nearly two-thirds of this year’s proceeds came from Facebook’s gigantic offering.

By going public — while remaining firmly under the control of its majority owner, the Glazer family — Manchester United is hoping to challenge the history of sports teams that have flailed when traded on stock exchanges.

Ed Woodward, Manchester United’s vice chairman, emphasized that the newly public company was less a team than a branding empire — with revenue from broadcasts and merchandise sales — built around one of the most successful soccer clubs in memory.

He said that officials from six sports leagues from around the world had asked how Manchester United officials built up an expansive commercial operation.

“This feels like it’s a fantastic opportunity,” he said in a telephone interview on Friday. “The story has been incredibly well received, especially in the U.S.”

Mr. Woodward recalled heading into meetings during Manchester United’s road show over the last two weeks that were standing room only, with potential investors clamoring for the team’s signature red-and-white gear.

But by Thursday afternoon, the company and its underwriters looked at the offering book and decided to accommodate what Mr. Woodward called “very-high-quality institutional investors” who were willing to buy in bulk at $14.

Skeptics of the offering pointed not only to the tortured history of publicly traded sports teams but also the specifics of Manchester United’s offering. The team raised money to pay some of the debt it incurred when Malcolm Glazer bought the club in 2005.

The Glazers also sold some of their holdings in the offering, though they are retaining control by holding onto a class of stock that carries 10 times the voting rights of the ordinary shares.

The Boston Celtics went public in 1986 and the Cleveland Indians in 1998. But the stocks struggled, and both were taken private in the last decade. Many British Premier League soccer clubs were publicly traded at one point or another, and performed miserably.

Manchester United fans have also expressed dismay over the offering, with one group having organized a letter-writing campaign complaining about the Glazers’ cashing out some of their holdings through the stock sale.

Mr. Woodward said that Manchester United remained committed to strengthening its team, with improvements in its commercial revenue making more cash available to attract top-flight players. “Through growing these business lines, we’ll have huge firepower to make player acquisitions,” he said.

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